The first step in developing a trading plan is to take an honest look at yourself.
Because you will be the only one using it, the cornerstone of your trading plan begins with self-reflection.
This introspection will show your trader profile, or who you are as a trader.
What kind of trading approach is best for you depends on who you are as a trader.
Trading techniques, systems, and methods that are incompatible with your personality and profile will significantly reduce your chances of success.
While most traders want to get into designing or finding trading systems and methods, they won’t know which ones fit their personality and particular scenario unless they designing or finding trading systems and methods, they won’t know which ones fit their personality and particular scenario unless they first spend some time reflecting on themselves.
Before you hit the Buy or Sell button on your trading platform, there are some questions you should ask yourself in order to better formulate your trading plan.
While you’re at it, jot down these responses.
Writing down your replies can help you remember what you’re going to accomplish and ensure you keep to your strategy.
What is Your Motivation to Be a Forex Trader?
What motivates you to become a forex trader?
Is the goal to get filthy rich? Is it for the thrill of it?
Is it because you want to try something new and exciting?
It is critical to understand your genuine reason and whether you should trade at all.
Forex traders who aren’t serious about their trading will be soon eliminated by the market.
For example, seeking thrills and seeking steady earnings do not go along.
You may relish the thrill of putting on a massive “I’m betting the farm” position, but you won’t be smiling when your transaction blows up in your face.
If you’re looking for thrills, go to a casino, jump out of a plane, or try driving an F1 racing car.
Even better, if you want to experience true adrenaline, drive an F1 racing vehicle out of a plane and land in a casino.
What have you determined to be your goal(s) for trading?
This can be expressed monetarily as a profit target (in dollars or as a percentage return) per unit of time.
For example, you could set a monthly goal of $4,223,834,145.53 or a weekly return of 529%.
Whatever you choose, make it explicit and measurable.
Set trading objectives that will help you grow as a trader.
It must be imprecise, such as “I want to be wealthy.”
It’s not enough to change it to “I want to be super rich.”
You gotta be Specific.
“I want to make 1% every week.”
“I want to be winning 50% of the time by the end of this year.”
“I want to double my account in six months.”
“I don’t want to make any trading mistakes for the day.”
By making your goals specific and measurable, not only will you know what you really want, but you’ll be able to monitor your progress and see whether you are improving or not.
If they are not specific, you’re just wasting your time.
